When Sandi and Jeff Johnson first saw the Cape Cod-style cottage in Cherry Hills, it fit more into the “potentially perfect” category than the “dreamy design” classification. “It was a dreary little house with dark colors and dingy drapes,” Sandi says. Add to that the ceilings were low and bedrooms cramped—not a good fit for the family they were planning. On the up side, however, were some very desirable features: nearly three acres of land, a pond, a creek, and a structurally sound house in a fabulous neighborhood.

As the pair balanced the pros and cons of the purchase, they asked themselves several questions: Could the house be brightened up? Would they be able to use the furniture they already owned? Could the existing cottage bear an addition and a facelift? And could it be childproofed? The Johnsons called in the experts and rolled up their sleeves.

“Actually, this house had that oldest of clichés,” says interior designer Lane Elisabeth Oliver, the first pro hired by the Johnsons for the transformation. “It had good bones.” It was two stories tall with spacious stairways, and the kitchen needed no work. The individual rooms were well-proportioned and looked out over richly landscaped yards in both the front and rear. “We just had to maximize what we started with,” Oliver says.

Replacing the dingy taupe tones with fresh color would definitely brighten the home. Oliver prefers to create intimate environments using rich colors. There is nothing wrong with white to brighten a room, she says, but it doesn't really make it feel any larger. Instead, it's more productive to think about the feeling you want and to create that sensation using color. One way to find colors that will work is to study the room's context. "I look for hints in the surrounding environment," Oliver says. In the stone blend surrounding the family-room fireplace, for instance, she found hints of a hearty tomato red, the kind of invigorating tone perfect for engendering a lively conversation. And in the dining room, Oliver wanted an organically fresh kind of feeling, and as it is adjacent to the garden she brought greens and yellows in from just outside the windows. In the master bedroom, Oliver went with a soothing buttery gold that would feel relaxing in the evening, yet cheerful come sunrise.

Saturating the rooms with colors helped address Sandi's second question: Would she be able to create well-designed spaces using her existing pieces? "Easily," said Oliver. Sandi and Lane had worked together on the Johnsons' previous home and had purchased furniture that was color- and texture-coordinated. There is no reason to buy all new furniture for a big move, Oliver insists, but you should be thinking now about pieces you'll want to keep with you wherever you go. Much of the Johnsons' furniture was reusable, because they had already purchased well-built, traditionally styled pieces covered in patterned fabrics that already harmonized. They were able to reuse a pair of wingbacks and a pair of provincial-style chairs in the family room, refinish a dresser to liven up a stairway landing, and freshen their bedroom look merely by buying new linens for the iron four-poster.

On the other hand, a newly purchased home deserves some fresh fittings. For the family room, Oliver brought in a new sofa covered in a John Brook chenille, which would tie those sets of existing chairs together. A new pair of ottomans perches in front of the fireplace. An expansive walnut coffee table finishes out the grouping. Oliver is pleased with the sense of scale here. "The pieces all have similar weight, which grounds the room," she says, "but the fabrics have a wide variety of patterns and sizes, which adds liveliness." Colors in the many fabrics—both old and new—tie the furniture to the snappy red walls and existing stone fireplace.

Oliver looked outdoors for the dining room's inspiration. She brought in the garden colors to contrast this room from the darker, cozier family space. On the ceiling she had an Italianesque medallion and vines hand-painted between the coffers to add detail for the eye. The table accommodates additional leaves for larger holiday gatherings. And the simple Parson chairs have legs finished to match the table and are covered in a floral Ralph Lauren linen. Oliver specified them without arms so the room would feel less crowded.

The master bedroom needed quite a bit of work. Oliver added the fireplace mantle with its dramatic columns and a pediment, and included a pair of club chairs so the couple could cuddle up to the fire. Silk drapes add a sense of luxury. "This was imagined as a place to escape," Oliver laughs, "but the kids are in here all the time now."

Soon after they settled in, the Johnson family grew—by four. The couple asked their architect, Michelle Wilson, A.I.A., to build about 1,400 square feet, adding two stories to the west end, placing a library-study overlooking the pond on the lower level and several bedrooms upstairs, for a house of approximately 5,000 square feet.

Once they'd revamped the interior, Lane and the Johnsons agreed that the home's outside appearance was wanting in the style department. The home was an ill-defined Cape Cod, but the existing rooflines and ground-floor openings gave it definite strength. After doing extensive research, Wilson transformed it stylistically into a shingle-style cottage, a turn-of-the-century fashion popular in New York and Connecticut. Wilson added split-faced stone to the entire first level. For the addition she created a tall gable facing the front drive, which allowed her to place an inviting Palladian window there. Around the corner, a sweeping arch covering a balcony overlooks the pond. Then she layered everything on the second level in traditional cedar shingles and white trim. "We took it into a purer form," she says.

Every designer working on homes where children live faces a similar dilemma: how to protect fine and expensive things from the attentions of active kids, in this case, four rambunctious boys ages 1 to 9. Oliver has a simple strategy: "Go with the flow," she says.

That meant that in the family room the patterned fabrics fulfill a role beyond color and scale; simply put, prints camouflage dirt. The coffee table was purchased with a "distressed" finish—it came into the house looking banged-up already, so no harm, no foul when it gets a kid-created scratch. Doors were put on a set of bookcases to cover up the easily breakable sound equipment inside. Accessories were kept above reach, and Oliver uses inexpensive objects to dress a room.

From the beginning Sandi and Jeff had two things working for them: They asked themselves smart questions and they took the long view. By wondering whether this house could meet their needs in both the short and long term, they minimized stress and maximized design as they transformed from a couple into family, and created a home to grow with them.

Patrick Soran is a frequent contributor to 5280's home and architecture coverage.